Supreme Court to hear landmark challenge to Obama health law

The Supreme Court agreed Monday to hear a legal challenge to President Obama’s healthcare law.

Oral arguments in the suit filed by 26 states and the National Federation of Independent Businesses are expected in February or March, clearing the way for a ruling next summer, at the height of the 2012 campaign.

Legal observers said the way the court handled the case makes clear just how significant the issue is, both politically and constitutionally.

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The justices set aside five and half hours for oral arguments, more than any other case in recent memory. And they agreed to hear every part of the challenge, including some elements that experts did not expect to make the cut.

The White House, which instead of seeking to prolong a legal fight over President Obama’s chief legislative victory asked for a Supreme Court review of the case, said it was “pleased” with the decision.

“We know the Affordable Care Act is constitutional and are confident the Supreme Court will agree,” White House Communications Director Dan Pfeiffer said in a statement.

Republicans also celebrated the court’s decision to hear the case.

“The American people did not support this law when it was rushed through Congress and they do not support it now that they’ve seen what’s in it,” Speaker John Boehner (R-Ohio) said in a statement. “This government takeover of health care is threatening jobs, increasing costs, and jeopardizing coverage for millions of Americans, and I hope the Supreme Court overturns it.”

Legal observers had expected the high court to choose the 26-state case, though they were surprised at the lengthy argument and the scope of the issues the court will consider.

“I think the court hears that this is the biggest case of the century,” said Randy Barnett, a Georgetown University law professor who represents NFIB.

The central question in the case is the healthcare law’s individual mandate, which requires almost every American to buy health insurance. The states and NFIB say it’s an unconstitutional use of Congress’s authority to regulate interstate commerce. If the Supreme Court upholds the mandate, they argue, Congress will be able to make citizens buy just about anything.

“This defines whether there are limited and enumerated powers of Congress,” Barnett said.

The Obama administration argues that the mandate does not require people to participate in commerce, but rather regulates how and whether they pay for the healthcare services that everyone will eventually need. That position has a winning record in federal appeals courts. Two have upheld the mandate; one has ruled it unconstitutional, and one declined to reach a decision on the constitutional issue.

The biggest surprise in Monday’s announcement was the court’s decision to hear arguments about the law’s Medicaid expansion. The states say it amounts to “coercion” and is unconstitutional. But no lower court has agreed with that position.

The justices also overrode the Justice Department’s recommendation against hearing the Medicaid issue. Tim Jost, a Washington and Lee University law professor, said he was “disappointed” to see the Medicaid question granted.

Jost, who believes the health law is constitutional, said a ruling in the states’ favor on the Medicaid question could have even bigger implications than striking the mandate.

“That would be a very revolutionary finding, because it would call into question all federal spending programs,” he said.

Attorneys who oppose the law were also surprised by the court’s decision. Greg Katsas, a Jones Day partner who represents NFIB, said it would have been easy for the court to avoid the Medicaid issue, given that lower courts all rejected the states’ position.

“I think the grant strongly suggests that they have interest in the issue,” Katsas said. “I don’t think you can go so far as to say it signals that the states are likely to win, but it does signal they’re viewing that as a serious question.”

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In addition to the constitutional questions surrounding the mandate and the Medicaid expansion, the court will consider two procedural issues.

The justices will hear arguments on severability — whether other parts of the law must fall if the mandate is ruled unconstitutional. The Obama administration says that if the mandate is struck down, the justices should also ax provisions that require insurance companies to sell coverage to sick people and block them from charging more for those plans. The states say the entire law rests on the fate of the mandate.

And the justices also said they’ll hear arguments about whether they can reach a decision at all. One lower-court judge said the constitutional questions about the mandate will have to wait until 2014 because of a separate federal law that says a tax must take effect before citizens can try to overturn it in the courts. The Supreme Court set aside an hour for arguments on that issue.

Justices Clarence Thomas and Elena Kagan did not recuse themselves from the process, despite activist groups’ calls for them to do so.

Conservative groups had called for Kagan to sit out the healthcare case because she was solicitor general when the solicitor general’s office began planning its legal defense of the health law and its individual mandate. Liberal groups said Thomas should not take part in the case because his wife has profited from speeches and other work explicitly calling for Congress to repeal the health law.

But neither was absent from Monday's order. The court’s practice is to list any recusals at this stage of the process, but it does not explicitly note or explain justices’ decisions to participate in a particular case.

Thomas and Kagan aren't expected to change their minds.

"Presumably, they made whatever judgments they were going to make," Katsas said.


—This story was posted at 10 a.m. and updated at 1:05 p.m.